Home News Two Years and Change: Checking-in on the Adoption of Apple Pay

Two Years and Change: Checking-in on the Adoption of Apple Pay

Apr 28, 2017

You can’t fault the tech enthusiasts and media types who believed they were bearing witness to the birth of an immediate game changer when Apple Pay was unveiled at the iPhone 6 press event in September 2014.  After all, it was one of those dazzling launch spectacles that Apple is nearly as beloved for as their elegant product design.  The iPod, iPhone, and iPad were all introduced to the world with the now familiar pomp and circumstance of Cupertino’s favorite annual gala.  Obviously, it’s a proven track record of success.

But two-and-a-half years onward, the expected paradigmatic shift in payment methods and adoption of Apple Pay, and other mobile pay options, has yet to materialize in seismic proportions. It takes two to tango in a financial transaction, and both consumers and merchants have been slower than imagined to embrace the quick flash of a mobile device as a means of rendering payment.

If the lightning sprint to seize Apple Pay as the de facto replacement of plastic cards and cash hasn’t happened, just how is user adoption going at this stage in the game? Surely if any company has a rich history of putting the right cards on the table at the right time, it’s Apple.

According to surveys by commerce and payments industry watchdog PYMNTS.com, 21.9% of respondents–those who had iPhones and made transactions at Apple Pay accepting merchants–had tried Apple Pay as of March 2017.  The current numbers also reveal a slight dip in adoption, down from an historic high of 23.8% in mid-2016.

However, the headcount of those who identify as regular Apple Pay users drops to less than half those amounts.

At the heart of this stagnant adoption rate are an apparent case of if-ain’t-broke-don’t-fix-it and a lack of user education.  A combined 68% of survey respondents cite satisfaction with their current payment methods or unfamiliarity with how Apple Pay works as reasons why they haven’t tried the service.

Among those frequently using Apple Pay, the service is making great strides in differentiating itself as an improvement over traditional plastic.  In October 2015, consumer opinion on usability metrics such as ease, speed, security, and convenience were all but split with half stating Apple Pay was superior to credit and debit cards and half seeing no difference.

Fast forward to today, and roughly 60% of users claim Apple Pay is an easier, faster, and more secure way to pay versus the 30% who still see no advantage over cards.

The most notable slice of conversion, and a big win for Apple Pay, is in the convenience category.  Eighteen months ago, 56% of users viewed the service as having no greater benefit than plastic.  That figure has somersaulted to 54% who now feel Apple Pay is a more convenient payment method.

On the merchant side of acceptance, a glimpse into an index of the top 100 internet retailers reveals Apple Pay’s present traction.
By latest count, 31% of the top 100 internet retailers accept Apple Pay, a slight uptick over the previous two quarters.  However, merchant adoption growth may accelerate in the near future as the rate at which banks are accepting Apple Pay is on a steady rise.  By March 2017, there were 2,091 banks globally accepting the service, signaling an addition of 652 new banks in the preceding nine month period.
Beyond the hard statistics, Apple Pay’s proliferation simply faces geographical constraints governed by where it’s available for consumers and merchants.  Putting a new chink in the armor of the global financial transacting system takes time and a well choreographed dance through the varying legal and compliance landscapes of many jurisdictions.

Apple has opted for a scattershot approach to rollout in the developed world over a finite regional implementation.  Currently available in 14 countries, Apple Pay’s footprint spans Asia, North America, Europe, and Australia with on-boarded countries such as the U.S. the U.K., Japan, China, and the Soviet Union.  The next wave of launch is expected to target Taiwan, Germany, and Italy.

While an overnight explosion into the Apple Pay-era proved to be the stuff of fantasy, there’s substantial evidence the service is slowly gaining a wider audience and will make an increasing impact on how we make payments for a long time.